Wednesday, May 2, 2012

Low production of rough diamonds alarms Surat

The latest figures by Kimberley Process
Certification Scheme (KPCS), international diamond regulators, on the
global diamond production have set the alarm bells ringing in the
world's biggest diamond cutting and polishing centre in Surat. The
production of rough diamonds around the world has depleted by about 20%
at 120 million carats this year compared to 150 million carats in 2007.
Industry sources said India is the biggest consumer of rough diamonds
in the world. In 2010-11, India imported about $11 billion worth of
rough diamonds while about polished diamonds worth $28 billion were
exported.

Varda Shine, managing director of Diamond Trading Company (DTC), who recently visited Gaborone in Botswana where De Beers
is shifting its sales and aggregation activities from its London
office, said, "We do not anticipate the production to go back to 150
million carats a year for another two to three years."
Diamond producers have struggled to find new large mines to replace aging
assets. Production at many of the world's biggest mines is falling as
supplies of more accessible diamonds near the surface are depleted. De
Beers' Orapa mine in Botswana began output in 1971, while its Jwaneng
project - world's largest diamond mine by production value - and Rio's
Argyle started in 1982. The last major mine to enter production was
Rio's Diavik in 2003.
Rough diamond prices rose 24% last year
after two consecutive annual gains of 32% as producers struggled to keep
pace with consumption. That advance could be prolonged as stagnant
production fails to satisfy surging demand from China and India.
However, the recent research by US-based consultancy firm Bain & Co.
stated that the use of diamonds may grow at double the pace of supply
through 2020 because of an expanding middle class in India and China.
Sanjay Kothari, vice-chairman, Gems and Jewellery Export Promotion
Council (GJEPC), told TOI, "Depleting diamond production the world over
is a cause for concern. But, we have Zimbabwe and other African
countries where the rough diamonds reserve is quite high and largely
remain unexplored. We have to tap these countries in order to satisfy
the needs of the diamond industry."
A DTC sightholder said, "Some
diamond categories like the large and natural coloured stones are going
to be a rarity because diamond production is depleting due to old
mines. There are no new discoveries in the sector in the recent years
and thus the supplies are likely to remain very low."